Marvell Technology Group Ltd. (MRVL) And Billionaire David Einhorn’s Investor Letter

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Stacking up all the tech companies from above, and Marvell is the cheapest, with some of the best growth opportunities:

Price to Earnings Price to Sales
Marvell 11.5 1.7
NVIDIA 14.2 1.8
Qualcomm 15.2 5.5
Texas Instruments (NASDAQ:TXN) 19.1 3.0
Intel 10.9 2.0
Five Year Earnings Growth (Wall Street estimates)
Marvell 12%
NVIDIA 10.7%
Qualcomm 14.6%
Texas Instruments 9%
Intel 12.3%

In looking over the valuation metrics, Marvell and Intel are two of the cheapest stocks, and the two also have solid growth estimates, so which is better? Based on Marvell’s ability to generate cash and balance sheet, Marvell may well be the best bet:

Historical Five Year Cash Flow Growth
Marvell 68%
NVIDIA 7%
Qualcomm 11%
Texas Instruments -4%
Intel 9.5%
Debt Ratio Current Ratio
Marvell 0% 4.6
NVIDIA 0% 4.5
Qualcomm 0% 3.4
Texas Instruments 28% 2.4
Intel 16% 2.4

Don’t be fooled. I am admirer of Einhorn and would consider taking a closer look at what Marvell has to offer investors. Einhorn has been investing in Marvell since the third quarter of 2011, and while it might appear he is trying to catch a falling knife, where the stock has continued to slide more than 35% since the end of 3Q 2011, there is still hope for the company. To boot, the tech company pays a 2.5% dividend yield.

See what else we found in Einhorn’s letter, Part 1 (Saviors of 2012), Part 2 (Big Bets for 2013)

The article Marvell Technology And Billionaire David Einhorn’s Investor Letter originally appeared on Fool.com and is written by Marshall Hargrave.

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